London School of Economics Friday 4th June 2004

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London School of Economics Friday 4th June 2004
SPV32543
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Dealing with Complexity in Rolls-Royce Marine

• Terry Stock
• Executive VP, Human Resources - Marine
• Leszek Puszczynski
• VP Customer Business - Defence Aerospace

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What are we going to talk about?
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The difference that the LSE and the project made

• gt 12 work streams now being implemented

LSE Complexity Group specifically brought
Academic Rigour
Methodology and Analytical Tools
Complexity Thinking
Change in Emphasis
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Rolls-Royce Marine Now
World Leadership in cruise, fast vessel, offshore
and naval markets
World Class engineering competencies people,
processes and tools
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Full Marine Market Reach and a Balanced Portfolio
Naval Commercial
Traditional Rolls-Royce
Vickers / Ulstein acquisition 1999
A balanced portfolio 1bn
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The acquisition brought with it

• 2,000 customers

Hundreds of products
Fast lead times
Commercial quality standards
Very international business
Different national cultures
Privately-owned culture Family
Nervousness of Rolls-Royce / Lack of trust /
History
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7,500 Employees
20030226 LSE - 3 March 2003/SLK.ppt
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Complexity
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2002 Conference Key Business Issues Identified
Clarifying roles and responsibilities
Number 1
Improving delivery performance
Improving products (reliability, quality, range)
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What did they mean?
But, everyone had a slightly different perspective
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Project launched September 2002 to achieve
Improved clarity of roles and responsibilities
Identify Understand Action plan
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The Project Plan
3 teams of RR and RR Marine personnel 1 team from
LSE (21 people)
Sept 02 Oct Nov Dec Jan 03 Feb Mar
Launch Team preparation Interviews LoM
questionnaire NetMap Agent based model Analyse
data Confirm understanding Sponsor
review Marine Exec review
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Process Map - Triangulation
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Tools Semi - Structured Interviews / Workshop
44 conference participants interviewed
Open questions about
the future
culture
customers
systems
failure
the present
organisation
communication
success
Decoding what is said (2-day workshop)
identify themes and tensions
identify underlying assumptions
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Themes (recurring)

• Over 100 different themes identified
• Summarised into 8 Overarching themes
• Complexity of structure - Communication
• Human behaviours - OBU / CFBU interface
• Relationships - Cultures
• Leadership / role of central - Identity
• team / management

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Underlying assumptions (inherent and widely-held
beliefs)

• Some of the main underlying assumptions
  identified
• In a matrix organisation, people need to
  manage/be managed differently
• Synergistic benefits can be realised
• People or businesses have to look after their own
  interests
• Theres a hidden agenda
• The customer is mine
• The current organisation is transitory, it will
  change
• People hide behind the matrix organisation
• Clarity is good
• Someone should make it clear for me
• If I am empowered, I will do the right thing

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Key outcomes in 4 broad areas

• Customer / Market Interface
• Account management process
• Customer Focus programme
• Product strategy process
• Working the Matrix
• Training and support for working in a matrix
• Leadership / Management / Process
• Marine Leadership Programme
• Co-ordinated change initiatives
• Strategy / Structure / Synergy
• Strategy and strategic process
• Structure, roles interfaces
• Synergistic benefits and knowledge sharing

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1. Customer/market interface

• Recommendations and outcomes
• Implement account management process across
  Marine including consistent establishment of the
  Customer Executive role
• Develop a Customer-Focus programme to
  reinforce, for example
• the benefits of a single point of contact in a
  complex environment
• the importance of market information in product
  development
• the need to put the most appropriate people in
  front of the customer
• Training programmes/Pilot running in Merchant
  business
• Clarify product strategy process
• Product strategy board structure implemented

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Product Strategy Process

• Market forecast and predicted sales
• Anticipated customer requirements
• Anticipated external constraints (legislation
  etc)
• Competing products

• Product concepts key attribute targets
• Product/technology availability (including supply
  chain)
• Business objectives
• Higher level system requirements

• Cross business buy-in required for Marine level
  prioritisation - i.e. move from site-based to
  product / system based strategy
• Product strategy documents required for each
  product area
• Iterative process as business and system
  strategies are refined, product and technology
  will follow
• Most important role of Product Strategy Boards is
  to prioritise CCS Stage 1 activity

Product StrategyProposal
Product Strategy Board
Marine, Commercial or Naval Executive
Marketing Led
Create Customer Solutions Stages 1 to 6
Engineering Led
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Rolls-Royce MarineProduct Strategy Board
Structure
Product Strategy Conference
Marine Product Strategy Board
Product Sector
Product Sector
Product Sector
Product Sector
Product Sector
Cable handling
Propulsion
Electrical
Prime
Systems
machinery
manoeuvring
controls
movers
Board
Board
Board
Board
Board
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Product Development Strategy Content / Format

• Overview of the business and market drivers
• Competitor assessment and competitive position
• Market size and requirements (current and future)
• New Product opportunities and requirements
• Basic assessment of risk, cost, timescale and
  profitability for each potential new product
• Outline development plans including supporting
  Research Technology programme
• Recommendation for a prioritised set of potential
  new products that should proceed to full
  business case, Project Policy Document and
  Project Requirement Document development

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2. Working the matrix

• Recommendations and outcomes
• Define desirable characteristics and ways of
  working in a matrix
• Training and support for working in a matrix
• Development of interactive presentation on how
  the matrix works
• Piloted in 2 businesses
• Released March 2004
• Video stories/engagement tool in preparation

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CUSTOMER
System
Product
CFBU
System
MES
OBU 1
Product
Product
Product
MS
Product
Product
OBU 2
OBU 2
OBU 2
OBU 2
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3. Leadership / management / process

• Recommendations and outcomes
• Develop business leaders and managers in Marine
• Marine Leadership Programme first 3-module
  programme completed in 2003
• Two more underway in 2004
• Community of managers concept Plenary at end
  2004
• Co-create change programmes rather than impose
• Co-ordinate the approach to change initiatives
  (BPI)
• Addressing four business priorities for 2004
  (Quality, Customer Responsiveness, Efficiency,
  Growth) co-created and coordinated

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4. Strategy / Structure / Synergy

• Recommendations and outcomes
• Clearer communication of structure, roles and
  interfaces
• Marine organisation charts on Intranet
  navigable
• Articles in in-house publications
• Video stories/engagement tool planned
• Assemble an IPT to identify and drive out
  synergistic benefits/share knowledge
• Common processes on supplier management external
  savings of 11m in 2003 claimed
• Procurement and Engineering databases sharing
  knowledge

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4. Strategy / Structure / Synergy contd.

• Clarify the strategic process
• Concluded and published
• Better and further communicate the strategy
• Various channels used to communicate strategy
  publications, Presidents newsletter, Presidents
  road-shows, Marine card, scorecard, new video,
  conference

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Backup slides follow
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The Holy Grail of Organisation Design give
examples of a few key ones
Facilitate (does not inhibit) emergence Encourages
self-organisation Explores its
space-of-possibilities Facilitates co-evolution
(Vickers U/RR) Understands connectivity and
interdependence (Relationships. Not isolation.
Co-evolve.) Fosters a collaborative culture (same
point)
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The Holy Grail of Organisation Design (Contd)
Creates variability - large repertoire of
responses (diversity people, cultures,
products, markets (speed and cost), cope with
change) Copes in unpredictable environment Not
too organised and not too random (fuzzy
matrix) Emphasises enabling infrastructures Facil
itates the emergence of
New ways of working and relating New
organisational forms Creation of knowledge